Thursday, June 19, 2014

Taubman banking big on Mall at UTC after selling 7 malls

Taubman Centers, the operator of the Mall at University Town Center, is betting on some big business for its Sarasota County mall to help offset income lost after it unloaded seven malls to Starwood Capital Group.

Taubman, based in Bloomfield Hills, Mich., announced Wednesday a $1.4 billion deal to sell seven malls to Starwood, targeted for a fourth quarter 2014 closing.

The malls are:

MacArthur Center (Norfolk, Va.)

Stony Point Fashion Park (Richmond, Va.)

Northlake Mall (Charlotte, N.C.)

The Mall at Wellington Green (Wellington, Fla.)

The Shops at Willow Bend (Plano, Tex.)

The Mall at Partridge Creek (Clinton Township, Mich.)

Fairlane Town Center (Dearborn, Mich.)

In an investors relations presentation, Taubman showed that the company figures that the three properties coming online in the next two years -- Mall at University Town Center in University Park, Mall of San Juan and International Market Place in Waikiki -- will "nearly replace" the net operating income loss from all seven of the sold malls.

Taubman's presentation went on to show that after the sale, all of its properties will be in areas with larger tenant sales per square foot, higher rents, better educated, wealthier and in more densely populated areas.

One of the largest demographic jumps Taubman will see with its new portfoliois a 17.4 percent increase in average households earning $200,000 and up within a 30-minute drive. That increase goes from 51,440 before the sale and 60,386 after the sale.

That should be no surprise to close watchers of this mall which is attracting high-end tenants and fashion anchors like Macy's, Saks Fifth Avenue, Apple and boutiques Michael Kors, Omega and Calypso St. Barth.

Taubman reported that its portfolio will be stronger for having 80 percent of its department stores as high-demand fashion anchors as opposed to 67 percent before. Taubman includes Bloomingdales, Lord & Taylor, Neiman Marcus, Nordstrom, Macy's and Saks Fifth Avenue in that category, representing 35 of its 44 department stores at its properties. Dillard's, which is coming to the Mall at UTC, would not fall into that category.

The Mall at UTC, which is a 50-50 partnership with Benderson Development Co., is expected to open Oct. 16.